NZ Dollar Trades Higher After RBNZ Holds Official Cash Rate Steady

The NZ dollar traded higher against its major opponents during the Asian session on Wednesday, after the Reserve Bank of New Zealand kept its Official Cash Rate unchanged at a record low.

The RBNZ maintained the OCR at 1 percent, as expected.

Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range, the bank said in its statement accompanying the decision. Low interest rates remain necessary to keep employment and inflation around target.

It was the third straight meeting with no change after the central bank reduced the OCR by 50 basis points on August 7, from 1.50 percent to 1.00 percent.

Asian markets remain mostly higher as anxiety ebbed over the spread of coronavirus.

U.S. President Donald Trump said Chinese President Xi Jinping told him the deadly virus will be gone by April as temperatures begin rising.

The kiwi appreciated to a 2-week high of 1.6857 against the euro from Tuesday's closing value of 1.7044. Next key resistance for the kiwi is seen around the 1.66 level.

The kiwi spiked up to a 6-day high of 0.6477 against the greenback, compared to 0.6402 hit late New York Tuesday. On the upside, 0.66 is possibly seen as the next resistance for the kiwi.

The NZ currency approached a 6-day high of 71.16 against the yen and a 5-day high of 1.0398 against the aussie, from yesterday's closing values of 70.28 and 1.0477, respectively. The kiwi may target resistance around 73.00 against the yen and 1.02 versus the aussie.

Looking ahead, Eurozone industrial production for December is due in the European session.

Federal Reserve Chair Jerome Powell will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee in Washington DC at 10:00 am ET.

In the New York session, U.S. monthly budget statement for January is scheduled for release.